Lancaster Resources Inc (CSE:LCR, OTCQB:LANRF) said on Monday it had completed the acquisition of the Lake Cargelligo gold project in New South Wales, Australia.
The deal, finalized on June 30, and includes a 100% interest in the district-scale property located in the prolific Cobar mining district.
Lake Cargelligo spans more than 28,700 hectares under a single exploration license and features multiple historical high-grade gold and silver occurrences.
Historical rock chip samples have returned values as high as 204 grams per tonne (g/t) gold and 273 g/t silver, while channel sampling yielded up to 16 metres at 5.83 g/t gold and 7.20 g/t silver, the company said.
The firm established a wholly owned subsidiary, Lancaster Gold Australia, to lead exploration and development activities in the region.
"This acquisition, together with the formation of Lancaster Gold Australia, marks a key milestone in our strategy to build a strong precious metals portfolio,” said Andrew Watson, Lancaster’s CEO.
“The Lake Cargelligo Gold Project offers exceptional exploration upside with significant historical high-grade results, and we are excited to begin systematic exploration to unlock its full potential for our shareholders.”
The project is located approximately 60 kilometers from the producing Mineral Hill Mine.
Terms of the acquisition include a total purchase price of C$210,000, comprising C$10,000 in cash and 10 million common shares of Lancaster priced at $0.02 per share at the time of agreement signing. The deal also includes a 2% net smelter return royalty, with repurchase provisions, and contingent milestone payments of up to C$3.68 million.
Lancaster said it plans to initiate a 2025 exploration program that will include geophysics, geochemical sampling, and drilling, noting that no modern geophysics has been applied to the property to date.
Separately, the company announced the termination of its option agreement for the Alkali Flats Lithium Project in New Mexico, citing a prolonged downturn in the lithium market. The decision reflects a broader strategy shift to prioritize precious and critical mineral assets with stronger return potential, the company said.
In a financial update, Lancaster also said it had amended certain unsecured convertible debentures originally issued between 2022 and 2023. The amendments extend the maturity date to December 2026, raise the annual interest rate to 12%, and capitalize accrued interest into principal. A 2% refinancing charge brought the total principal outstanding to C$561,694. The revised debentures are convertible at C$0.28 per share, and no related parties or commissions were involved in the transaction.